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Friday, April 30, 2004
Philippines' Belle Q1 net profit 24.45 mln pesos vs 163.4 mln
Bank of the Philippine Islands Q1 profit up 19 pct on interest gains
OUTLOOK - Philippine April CPI seen up 3.8-4.0 pct yr/yr
Philippines' Empire East Land 2003 net profit 119.8 mln pesos vs 105.5 mln
Philippine Savings Bank Q1 profit up 30 pct on interest, fee-based gains
Philippines' ICTSI sets 38 mln usd capex budget for 2004
Philippines' end-March M3 up 4.9 pct yr-on-yr vs 4.4 pct rise in Feb
Philippines' Megaworld 2003 net profit 574.2 mln pesos vs 431.8 mln
Manila shares close lower on extended profit-taking ahead of May polls
Philippines' San Miguel says no deal yet on ATI grains terminal purchase
Indonesia to charge Bashir with Bali and other bombings - official
STOCK ALERT - Philippines' PLDT sharply lower on extended profit-taking
Philippines' Filinvest Land 2003 net profit 508 mln pesos vs 504 mln
Philippine National Bank confirms 19 pct growth forecast for 2004 net profit
Philippines' Piltel expects to return to profitability as early as Q1
Philippines end-Dec FCDU loans 4.88 bln usd vs 4.84 bln at end-Sept
Mitsubishi group to help expand Mitsubishi Motors operations in Asia - report

Thursday, April 29, 2004
Forex - Philippine peso slides back to 56 on dollar demand, weak regionals
Philippines' Marina lifts grounding order on five Nenaco vessels
Philippines' Smart rules out public offering by August, merger with Piltel
Philippines' Asian Terminals declares cash dividend per share of 0.16 peso
Philippines' Piltel sees narrower net loss in Q1
Philippines' C & P Homes 2003 net loss 59.0 mln pesos vs loss 971.7 mln
Philippines' ABS-CBN sees Q1 net profit growth 'closer to 10 pct'
Manila shares close weaker on technical correction, Wall Street falls
Philippines stuck in high-debt, low-investment trap - ADB
Philippines' Security Bank Q1 net profit up 20 pct yr/yr on interest gains
STOCK ALERT - Philippines' Metrobank firmer on earnings prospects, dividend
STOCK ALERT - Philippines' PLDT weaker on profit-taking
Philippines' First Metro plans to underwrite Splash, Shell IPOs - report
Philippine National Bank sees 19 pct yr/yr growth in 2004 net profit - report
Philippines' Napocor may issue 1 bln usd global bonds - report
Philippine April CPI seen up 3.9 pct yr/yr on fuel, fare hikes - central bank

Wednesday, April 28, 2004
Philippines' Metrobank sees 2004 net profit at 3.5-4 bln pesos
Philippines' Arroyo signs law restoring tax-exempt status of FCDUs, OBUs
Mitsubishi Motors Philippines to invest 10 bln pesos for new SUV model - DTI
Philippines' Ayala Land 2-bln peso borrowing plan approved by SEC
Philippines' San Miguel sets up Manila port distribution center to cut costs
Taiwan's 2004 GDP growth seen at 5.4 pct in 2004, 4.7 pct in 2005 - ADB
Manila shares close at fresh 3-yr high on hopes of Arroyo win, strong earnings
Asia faces new banking crises without reforms of the sector - ADB
STOCK ALERT - Philippines' Meralco firmer after return to profit in Q1
Philippine Treasury raises T-bill, T-bond offerings in May
Asia's developing economies must reform to attract FDI - ADB
ADB sees Philippine GDP up 4.5-5.5 pct in 2004, 2005 on consumer spending
Ford Philippines commits to export 16,000 CBU units this year - DTI
Philippines' Nenaco loses 75 mln pesos after Marina grounds 5 vessels
Manila shares outlook - Mixed to higher on Q1 earnings, Arroyo poll lead

April 26 - 27
April 21 - 23
April 19 - 20
April 14 - 16
April 12 - 13
April 5 - 6 
April 1 - 2

 


 
Philippines' Belle Q1 net profit 24.45 mln pesos vs 163.4 mln


     MANILA (AFX-ASIA) - Belle Corp's first quarter to March consolidated results:
      Net sales of real estate and club shares - 60.3 mln pesos vs 41.4 mln
      Cost of real estate and club shares - 14.8 mln pesos vs 15.9 mln
      Gross profit - 45.4 mln pesos vs 25.5 mln
      Opg expenses - 19.2 mln pesos vs 16.05 mln
      Opg profit - 19.7 mln pesos vs loss 2.3 mln
      Net profit - 24.45 mln pesos vs 163.4 mln
      Earnings per share - 0.004 peso vs 0.026
     Belle is involved in gaming and property development.
     (1 usd = 56.07 pesos)
     afxmanila@afxasia.com
 

 

Bank of the Philippine Islands Q1 profit up 19 pct on interest gains


     MANILA (AFX-ASIA) - Bank of the Philippine Islands (BPI) said it posted a net profit of 1.61 bln pesos in the first quarter to March, up 19 pct year-on-year on the back of higher net interest income.
     Total revenues grew by 10 pct year-on-year resulting from a higher net interest income, it said, without giving absolute figures.
     "Net interest margin widened by 47 basis points due to a higher composite yield on loans, while deposit cost was maintained at previous year's level," the country's second largest lender said in a statement.
     Non-interest income was basically unchanged, it added, while income from the bank's insurance subsidiaries, asset management fees, rental on bank properties and corporate finance fees showed "notable" improvements.
     However, it said these gains were negated by lower income from asset sales, securities and foreign exchange trading gains, and service charges and commissions.
     Operating expenses increased by a nominal 1 pct year-on-year.
     BPI's total resources stood at 414 billion pesos, slightly lower than the end-2003 level but 3 pct higher year-on-year.
     Deposits totaled 325 bln pesos as of end-March, while total loans amounted to 201 bln, it said, without giving comparative figures.
     (1 usd = 56.07 pesos)
     afxmanila@afxasia.com
 

 

OUTLOOK - Philippine April CPI seen up 3.8-4.0 pct yr/yr


     MANILA (AFX-ASIA) - The Philippines' consumer price index (CPI) in April is expected to have risen 3.8-4.0 pct year-on-year, compared with 3.8 pct in March, reflecting inflationary pressures from fuel price hikes and election-related spending, economists said.
     The National Statistics Office will release the April CPI data on May 5.
     Economists, however, said the central bank is not expected to resort to monetary policy tightening so soon despite the uptrend in inflation, which they think is still manageable.
     The central bank expects the annualized April inflation rate to come in at 3.9 pct, a bit faster than last month's 3.8 pct, with the pressure coming from higher fuel prices and transport fares.
     "I think the central bank considers an inflation of 3 to 4 pct as still relatively low. I don't think they will change their policy this early," said Song Seng Wun, a regional economist at DBS Bank, who sees April inflation at 3.8 pct year-on-year.
     He said the central bank will likely stick to its current policy in order to ensure much stronger economic growth.
     The government is aiming for full-year GDP growth of 4.9-5.8 pct this year, faster than last year's actual growth of 4.5 pct.
     Julian Wee, a regional economist at Singapore-based IDEAglobal.com, said spending related to the May 10 national elections likely pushed up consumer prices in April.
     He also cited bad weather conditions, with the summer heat seen adversely affecting agricultural production.
     He expects the April inflation rate to come in at 4.0 pct year-on-year.
     However, he said the peso's recovery from a record low of 56.45 to the dollar in late March to as high as 55.54 this week likely helped to limit inflationary pressures.
     Jonas Ravelas, market strategist at Banco de Or Universal Bank, projects a 3.9 pct year-on-year CPI rise in April.
     Luz Lorenzo, an economist at ATR-Kim Eng Securities, expects the annualized rate to be unchanged at 3.8 pct.
     Inflation averaged 3.5 pct year-on-year in the first quarter.
     The government aims to limit the full-year inflation rate at the 4.0-5.0 pct range.
     afxmanila@afxasia.com
 

 

Philippines' Empire East Land 2003 net profit 119.8 mln pesos vs 105.5 mln


     MANILA (AFX-ASIA) - Property developer Empire East Land Holdings Inc's 2003 consolidated results:
      Revenues - 753.46 mln pesos vs 693.15 mln
      Opg expenses - 417.96 mln pesos vs 392.58 mln
      Opg profit - 335.5 mln pesos vs 300.6 mln
      Net profit - 119.8 mln pesos vs 105.5 mln
      Earnings per share - 0.0041 peso vs 0.0021
     (1 usd = 56 pesos)
     afxmanila@afxasia.com
 

 

Philippine Savings Bank Q1 profit up 30 pct on interest, fee-based gains


     (Repeating to fix headline)
     MANILA (AFX-ASIA) - Philippine Savings Bank (PSBank) said it posted net profit of 81 mln pesos in the first quarter to March, up 30 pct year-on-year, on interest income and fee-based gains.
     PSBank, a member of the Metrobank group, which also includes the country's largest lender, Metropolitan Bank & Trust Co, said net interest earnings rose 24 pct year-on-year in the first quarter. It did not provide comparative figures.
     Service charges and other income grew 89 pct year-on-year during the same period, it said in a statement.
     The bank's total resources stood at 36 bln pesos as of end-March, 24 pct higher than the end-2003 level of 29 bln.
     Net customer loans reached 20.3 bln pesos as of end-March, up 21 pct from the year-earlier level of 16.8 bln.
     Deposits grew 29 pct to 30.1 bln pesos from 23.4 bln a year ago.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com
 

 

Philippines' ICTSI sets 38 mln usd capex budget for 2004


     MANILA (AFX-ASIA) - Port operator International Container Terminal Services Inc (ICTSI) is to spend 38 mln usd this year to expand its local and international operations, company Chairman Enrique Razon Jr said.
     Speaking to reporters after ICTSI's annual stockholders' meeting today, Razon said the company is allocating 16 mln usd to grow its recently-acquired Baltic Container Terminal (BCT) in Gdynia, Poland.
     He said BCT's expansion is necessary given the entry of Poland into the European Union.
     Last year BCT handled 304,745 twenty-foot equivalent units (TEUs), 23 pct higher than the 2002 volume of 247,907 TEUs.
     "With Poland entering the European Union on May 1, we feel that the dramatic growth in volume that we are now seeing will strengthen even further, " Razon said.
     The 16 mln usd is part of the 100 mln usd ICTSI intends to invest in the Poland terminal operations over the next five years, he said.
     
     Meanwhile, ICTSI is also earmarking 12 mln usd for the operations of the port terminal in Suape, Brazil.
     Last year the Suape terminal handled 62,642 TEUs, 7 pct lower than the 2002 level of 67,602 TEUs.
     The remaining 10 mln usd will be spent on the company's local port operations, Razon said.
     ICTSI posted net profit of 527 mln pesos in 2003 from 2.7 bln a year earlier, which included an extraordinary gain of 3.45 bln from the sale of subsidiary ICTSI International Holdings Corp.
     On a recurring basis, net profit in 2003 rose 52 pct year-on-year from 348 mln.
     The company is looking at investment opportunities in Europe, Middle East and Africa, Razon said.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com
 

 

Philippines' end-March M3 up 4.9 pct yr-on-yr vs 4.4 pct rise in Feb


     MANILA (AFX-ASIA) - The Philippines' domestic liquidity or M3 expanded by 4.9 pct year-on-year in March to 1.7 trln pesos, faster than the previous month's rise of 4.4 pct, the central bank said.
     It attributed the expansion to increases in net foreign assets of the monetary system and in lending to both the public and private sectors.
     Seasonally-adjusted, M3 maintained its February growth of 0.3 pct in March, the central bank said in a statement.
     The monetary system's foreign assets increased in March, as investments in foreign currency-denominated securities by banks and the central bank rose, it said.
     Lending to the private sector rose 14.3 pct year-on-year in March, slower than the 17.5 pct annual rise in February. Credit to the private sector grew 0.1 pct year-on-year, slowing from the 0.6 pct rise in the previous month, the central bank said.
     "The growth in the overall demand for credit is consistent with the steady improvement in domestic demand, evident in various indicators of domestic economic activity," central bank officer-in-charge Alberto Reyes said, citing higher capacity utilization rate of the manufacturing sector in February, and increases in car and energy sales in March.
     "Going forward, the stance of monetary policy will ensure an appropriate level of liquidity that is supportive of the central bank's objectives of price stability and sustained economic growth."
     (1 usd = 56 pesos)
     afxmanila@afxasia.com

 

Philippines' Megaworld 2003 net profit 574.2 mln pesos vs 431.8 mln


     MANILA (AFX-ASIA) - Megaworld Corp's 2003 consolidated results:
      Revenues - 1.5 bln pesos vs 1.16 bln
      Opg expenses - 703.9 mln pesos vs 611.3 mln
      Opg profit - 800.0 mln pesos vs 549.3 mln
      Net profit - 574.2 mln pesos vs 431.8 mln
      Earnings per share - 0.06 peso vs 0.05
     Megaworld is involved in real estate, hotel, leisure and resort development and management, merchandising, trading, information technology and gaming.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com

 

Manila shares close lower on extended profit-taking ahead of May polls


     MANILA (AFX-ASIA) - Share prices closed lower, extending declines as investors locked in recent gains amid growing political concerns just 10 days before the national elections, dealers said.
     They said the peso's slide back to 56 against the US dollar, Wall Street's declines overnight, and regional concerns over a slowdown in China, as Beijing officials signal the need to cool the country's overheating economy, also undermined sentiment.
     The 30-company composite index closed down 26.94 points or 1.70 pct at 1, 555.01 on volume of 96.9 mln shares valued at 619.6 mln pesos. The index moved a range of 1,554.75 and 1,582.47.
     In the broader market, losers led gainers 28 to 19, with 32 stocks unchanged.
     At the Philippine Dealing System, the peso averaged 56.022 to the dollar at noon, after closing at 56.00 yesterday.
     "Investors pocketed more gains, exercising caution given expectations of a more volatile market next week ahead of the May 10 elections," said Citiseconline.com analyst Mark Alan Canizares.
     "Investors will likely be sidelined next week, keeping an eye ... on local political developments."
     Top-traded Philippine Long Distance Telephone Co (PLDT) was down 55 pesos at 1,080 on 217,930 shares.
     PLDT's 45-pct owned mobile phone affiliate Pilipino Telephone was down 0. 04 at 1.70 on 16.4 mln shares, even after saying that preliminary figures show its net profit came in at about 8 mln pesos in the first quarter to March, and not a net loss as chairman Napoleon Nazareno projected yesterday.
     Investors are awaiting a report from PLDT's wholly-owned mobile phone unit Smart Communications Inc on the outcome of its offer to acquire some 20 bln pesos worth of Piltel's debts.
     Piltel creditors have until today to respond to Smart's offer of cash or swapping of debts for Smart-issued bonds or sovereign bonds.
     Globe Telecom was down 5.00 at 850.
     Ayala Land was down 0.10 at 5.70, while parent Ayala Corp was down 0.20 at 5.70 ahead of the announcement of their first quarter results next week.
     ABS-CBN Holdings Corp was down 0.75 at 24.
     Bank of the Philippine Islands was down 1.00 at 48.50.
     SM Prime Holdings was down 0.10 at 6.20.
     The all-shares index was down 6.13 points at 971.47.
     The commercial-industrial index fell 41.17 to 2,441.83, while property dropped 8.25 to 548.70.
     Mining was up 17.37 at 1,422.73, while oil was unchanged at 1.18.
     Banking and financial services shed 6.00 to 443.79.
     afxmanila@afxasia.com

 

Philippines' San Miguel says no deal yet on ATI grains terminal purchase


     MANILA (AFX-ASIA) - Food and beverage conglomerate San Miguel Corp said it has not yet reached any definitive agreement regarding its planned purchase of Asian Terminals Inc's (ATI) grains terminal in Mariveles, Bataan.
     "Negotiations are continuing between the company and ATI over the proposed purchase of the Mariveles grains terminal," San Miguel told the stock exchange.
     San Miguel was reacting to a newspaper report saying it would finally close the 2.0 bln peso deal with ATI within the next six months after almost two years of negotiations.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com

 

Indonesia to charge Bashir with Bali and other bombings - official


     JAKARTA, April 30 (AFP) - A top Indonesian anti-terrorism official said militant Muslim cleric Abu Bakar Bashir will be charged with the Bali bombings and numerous other attacks that the Jemaah Islamiyah carried out.
      Ansyaad Mbai, who heads the anti-terrorism desk at the security ministry, told Agence France-Presse, following Bashir's arrest earlier today, the charges will relate to "terrorism cases in Indonesia, starting in 2000 until the Bali bombing and the Marriott bombing."
     "The culprits are JI and JI is led by him. That is the connection," Mbai said. "Now, the police have proof that Abu Bakar Bashir is the leader of JI."
     Mbai said it is certain an indictment against Bashir, 65, will mention the Oct 2002 Bali nightclub bombings, which killed 202 mostly Western vacationers.
     The indictment will also name the JW Marriott hotel bombing, which killed 11 Indonesians and a Dutch banker in Jakarta last August.
     The charge will relate to many cases, but we will group them together, he said.
     Among the other attacks to be cited are the Christmas Eve 2000 bombings of churches and priests, which killed 19 people, the bombing of a Jakarta shopping mall, and a car bombing, which badly wounded the Philippines ambassador, he said.

 

STOCK ALERT - Philippines' PLDT sharply lower on extended profit-taking


     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co (PLDT) was sharply weaker in late morning trade as investors locked in recent gains on the back of first-quarter earnings expectations, dealers said.
     PLDT was top-traded so far and down 50 pesos at 1,085 on 72,170 shares.
     Its American Depositary Receipts (ADRs) retreated 0.29 usd to 20.15 in New York overnight.
     Dealers said investors are largely in the mood to lock in profits as the May 10 presidential elections draw closer.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com

 

Philippines' Filinvest Land 2003 net profit 508 mln pesos vs 504 mln


     MANILA (AFX-ASIA) - Filinvest Land Inc said it posted a net profit of 508 mln pesos in 2003, little changed from the previous year's 504 mln.
     Sales reservations increased 25 pct year-on-year to 2.04 bln pesos, driven by higher sales in the middle-income group. However, realized gross profit fell 10 pct due to the decline in sales booked, the real estate developer said in a statement.
     It explained that revenue from the sale of a unit is recognized only upon the full receipt of the downpayment.
     "There is a time lag between sales reservations and revenue recognition. Therefore, the increase in sales reservations in 2003 will be felt in 2004," said company first vice-president Fely Ramos.
     She said the decline in realized gross profit was offset by a reduction in expenses and an increase in other income.
     For the first quarter of 2004, Filinvest Land sales reservations rose 88 pct year-on-year, driven by a surge in the socialized and middle-income sectors, it said.
     "Given the encouraging signs of the property sector's recovery, Filinvest Land is positive about the industry's growth for 2004," it said.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com

 

Philippine National Bank confirms 19 pct growth forecast for 2004 net profit


     MANILA (AFX-ASIA) - Philippine National Bank (PNB) expects its 2004 net profit to grow 19 pct year-on-year to 200 mln pesos, confirming a recent newspaper report.
     The bank is confident the economy will pick up after the May 10 presidential elections.
     PNB, partly-owned by the government and businessman Lucio Tan, posted a first quarter to March net profit of 20 mln pesos, down from 53 mln in the same period last year, on some non-recurring effects of tax changes, a rise in interest rates and a different timing in the deployment of Tier 2 funds.
     However, PNB said the period was its seventh consecutive profitable quarter after five years of losses.
     The lender said the first-quarter results were better than it had targeted and that it expects to gain momentum in the third and fourth quarters of this year.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com

 

Philippines' Piltel expects to return to profitability as early as Q1


     MANILA (AFX-ASIA) - Pilipino Telephone Corp (Piltel) said its preliminary figures show a net profit of about 8 mln pesos for the first quarter to March, and not a net loss as its chairman projected yesterday.
     "This net profit figure is still subject to final approval by Piltel's board of directors as its meeting for May 13, at which time Piltel will release its full financial results," Piltel said in a statement.
     Piltel, which offers mobile phone service under the Talk 'N Text brand, had reported a net loss of 360.2 mln pesos in the first quarter of 2003.
     Piltel chairman Napoleon Nazareno told reporters, after yesterday's annual stockholders' meeting, that Piltel saw its subscriber base grow to more than 3 mln as at end-March from 1.97 mln a year earlier.
     "The first quarter was favorable in terms of financial results, largely due to subscriber take-up. All indicators showed good results," said Nazareno, who had initially projected a narrower net loss in the first quarter.
     He said Piltel's first-quarter performance is in line with the company's forecast of return to profitability this year, with 2004 earnings seen at around 400 mln pesos.
     Philippine Long Distance Telephone Co (PLDT), of which Nazareno is president, owns 45 pct of Piltel.
     (1 usd = 56 pesos)
     afxmanila@afxasia.com

 

Philippines end-Dec FCDU loans 4.88 bln usd vs 4.84 bln at end-Sept


     MANILA (AFX-ASIA) - Foreign currency loans extended by Philippine banks increased to 4.883 bln usd as of end-December from 4.840 bln as of end-September, the central bank said.
     It attributed the growth in loans extended by banks' Foreign Currency Deposit Units (FCDU) to net loan releases of 58 mln usd and an upward foreign exchange revaluation adjustment of 25 mln usd during the period.
     These adjustments were partly offset by the downward adjustment of 40 mln usd due to rebooking of accounts and audit findings, the central bank said in a statement.
     Meanwhile, foreign currency deposits rose by 163 mln usd to 13.421 bln during the same period, it said.
     The overall loans-to-deposit ratio remained unchanged at 37 pct by end-2003, it said.
     afxmanila@afxasia.com

 

Mitsubishi group to help expand Mitsubishi Motors operations in Asia - report


     TOKYO (AFX-ASIA) - Mitsubishi Group companies plan to help expand Mitsubishi Motors Corp's (MMC) Southeast Asian operations, as part of restructuring initiatives after DaimlerChrysler AG refused to provide further capital to MMC, the Yomiuri Shimbun reported, without citing sources.
     The expansion includes an increase in production capacity in the Philippines and Thailand.
     Under the plan, the Philippine factory is to begin producing new sport utility vehicle (SUV) models, with a target of 200,000 vehicles production in seven years.
     Some 4 bln yen out of 20 bln for the Southeast Asian SUV business will be invested there, the report said.
     Mitsubishi Corp is to cooperate with MMC in expanding sales in Asia, the report said.
     kyoko.hasegawa@afxasia.com

 

Forex - Philippine peso slides back to 56 on dollar demand, weak regionals


     MANILA (AFX-ASIA) - The peso slipped back to 56 to the US dollar level on strong demand for greenbacks by corporates hedging their requirements ahead of the May 10 presidential elections, and on short-covering by banks amid weakening regional currencies, dealers said.
     The peso traded between 55.760 and 56.000 and closed at its intraday low, which is also its weakest finish in more than three weeks. It closed at 55. 750 yesterday.
     Volume totaled 234.5 mln usd.
     Dealers said the peso's slide was in line with the weakening of regional currencies, including the yen, amid concerns that the Chinese government may adopt a tighter monetary policy to cool its overheating economy.
     There have also been expectations of an interest rate hike in the US, which pressured regional currencies, they added.
     "Corporates are hedging ahead of the May 10 elections, plus it's import season, so demand for dollars is high," a commercial bank dealer said.
     "The dollar is also strong across the board."
     There were rumors the central bank was in the market supporting the peso at 55.85 in morning trade, the dealer added.
     Central bank deputy governor Amando Tetangco Jr said banks covered their short dollar positions especially after the Thai baht weakened.
     The dealer said the peso may test the 56.15 support for the peso tomorrow.
     afxmanila@afxasia.com

 

Philippines' Marina lifts grounding order on five Nenaco vessels


     MANILA (AFX-ASIA) - The Maritime Industry Authority (Marina) said it has lifted the grounding order on five vessels belonging to Negros Navigation Co (Nenaco) after the shipping firm submitted a revised financial statement to show it is still able to sustain operations.
     Marina had suspended from last Friday Nenaco's permit to operate the five vessels after claiming the company was financially incapable of continuing to operate.
     Nenaco said it incurred revenue losses totaling 75 mln pesos over the five days that it could not operate the five vessels.
     The company recently won a court order immediately suspending debt payments before the implementation of a rehabilitation program.
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

Philippines' Smart rules out public offering by August, merger with Piltel


     MANILA (AFX-ASIA) - Smart Communications Inc will not offer its shares to the public on or before August this year nor will it merge with listed-affiliate Pilipino Telephone Corp (Piltel) to facilitate a backdoor listing, Smart president Napoleon Nazareno said.
     "We have to seek deferment of the IPO (initial public offering). There may be avenues we could pursue and we are looking at various options," Nazareno told reporters after today's annual stockholders' meeting of Piltel, of which he is chairman. He, however, refused to elaborate.
     Its franchise requires Smart to sell 30 pct of its shares to the public by August this year.
     Smart, the market leader in the mobile phone business, is 100 pct owned by Philippine Long Distance Telephone Co (PLDT) and is the main source of PLDT's earnings.
     Despite an offer from Smart to absorb Piltel's debts, Nazareno said a merger between the two mobile phone firms is still not being considered.
     He said it will be more beneficial for Smart to keep Piltel as a separate unit, that is, if Smart eventually takes control of Piltel.
     Smart has given Piltel creditors until tomorrow to accept its cash offer or to swap their exposure for Smart-issued bonds or sovereign bonds.
     Smart also intends to acquire PLDT's 45 pct stake in Piltel.
     "There is no intention for Piltel to merge with Smart in case the debt transaction happens. And if we are able to conclude an equity transaction, there is no intention for us to statutorily merge and no intention for us to backdoor list through Piltel," he said, reiterating an earlier statement made by PLDT on the issue that had been the subject of speculations in the stock market.
     Nazareno is also president of PLDT.
     PLDT chairman Manuel Pangilinan said in February that the most ideal timetable for an IPO will be 2007, or once PLDT had substantially reduced its debt and the fixed-line business could stand on its own.
     PLDT's total debts stood at 2.9 bln usd as of end-2003, which will be reduced further this year by 350 mln usd, the company said.
     afxmanila@afxasia.com

 

Philippines' Asian Terminals declares cash dividend per share of 0.16 peso


     MANILA (AFX-ASIA) - Ports and logistics operator Asian Terminals Inc said it will pay a cash dividend per share of 0.16 peso, or 320 mln pesos in total, to shareholders on record as of May 28.
     Payment will be made on or before June 22.
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

Philippines' Piltel sees narrower net loss in Q1


     MANILA (AFX-ASIA) - Pilipino Telephone Corp (Piltel) expects to have narrowed its net loss in the first quarter to March from 360.2 mln pesos in the same period last year, company chairman Napoleon Nazareno said, citing gains in the mobile phone business.
     He said Piltel, which offers wireless service under the Talk 'N Text brand, saw its subscriber base grow to more than 3 mln as at end-March from 1. 97 mln previously.
     "The first quarter was favorable in terms of financial results, largely due to subscriber take-up. All indicators showed good results," Piltel chairman Napoleon Nazareno said after today's annual shareholders' meeting.
     The showing is in line with the company's forecast that it will return to profitability this year with the 2004 earnings seen at around 400 mln pesos, he added.
     He gave no first-quarter figures.
     Philippine Long Distance Telephone Co (PLDT) owns 45 pct of Piltel.
     "The subscriber take-up was due to the success of the Pasa Load that made small-denominated loads available to subscribers," said a Piltel official.
     Pasa Load allows Piltel subscribers to share air-time loads with each other. The scheme worked favorably for affiliate Smart Communications Inc, PLDT's wholly-owned wireless unit, which pioneered it.
     Smart has offered to acquire some 20 bln pesos worth of debts of Piltel with an offer of cash to the latter's creditors or through a swap of debts for Smart-issued bonds or sovereign bonds.
     Smart also intends to acquire PLDT's stake in Piltel.
     Many see the Smart-Piltel transaction as being beneficial to PLDT. Piltel creditors have until tomorrow to consider Smart's swap offer.
     "Smart would want to have complete access to the revenue of Piltel. We would like to take advantage of Talk 'N Text's penetration of the lower end of the market," said Nazareno, who is also president of PLDT.
     He said Piltel has created a committee that will safeguard the interests of minority shareholders should a debt and equity buyout take place.
     Independent directors Edward Go, Melito Salazar and Carlos Pedrosa will examine the proposed Smart-Piltel transaction to see if it will adversely affect small Piltel shareholders.
     The committee had appointed CLSA Exchange Capital as financial advisor and Sycip, Salazar, Hernandez and Gatmaitan as legal advisor.
     Smart said it will proceed with the debt swap only if creditors representing at least 75 pct of Piltel's existing debt agree to sell or retire their exposure.
     "As of now, we haven't reached 75 pct," Nazareno said.
     Piltel had 48,186 land-line subscribers as at end-2003, but 83 pct of its gross earnings last year came from the wireless phone business, which grossed 9.031 bln pesos, up 54 pct from 5.87 bln in 2002.
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

Philippines' C & P Homes 2003 net loss 59.0 mln pesos vs loss 971.7 mln


     MANILA (AFX-ASIA) - Property developer C & P Homes Inc's 2003 results:
      Revenue - 2.73 bln pesos vs 2.87 bln
      Cost and expenses - 2.76 bln pesos vs 3.8 bln
      Income Tax - 33.34 mln pesos vs 29.5 mln
      Net loss - 59.0 mln pesos vs loss 971.7 mln
      Loss per share - 0.01 peso vs LPS 0.20
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

Philippines' ABS-CBN sees Q1 net profit growth 'closer to 10 pct'


     (Updating further with partial repayment of debt in March)
     MANILA (AFX-ASIA) - ABS-CBN Broadcasting Corp expects its net profit and revenue growth for the first quarter to March to be "closer to 10 pct," said chairman and chief executive officer Eugenio Lopez III said.
     Full-year net profit and revenue are expected to grow at double-digit rates, he said, without giving figures.
     ABS-CBN booked a net profit of 1 bln pesos in 2003.
     At a news briefing after ABS-CBN's annual shareholders' meeting this morning, Lopez also said the company intends to declare a cash dividend equivalent to 50 pct of its 2003 net profit, as soon as it gets the approval of its creditors.
     "ABS-CBN had good results in 2003 with double-digit revenue, earnings and cash flow growth and the company would like to share its exceptional performance with its stockholders," he said.
     In a statement, meanwhile, the company said it repaid 1.0 bln pesos of its debt obligations in March, using internally-generated cash flows, accumulated from savings through higher revenues and cost control measures.
     It expects the repayment to have improved its debt-to-equity ratio to 37 pct from 44 pct as of end-2003, and reduced its outstanding debt to 4.8 bln pesos, of which 1.1 bln is due within the year.
     "ABS-CBN is confident of meeting the rest of its debt obligations as its EBITDA (earnings before interest, taxes, depreciation and amortization) grew 18 pct to 4.295 bln pesos last year from 3.642 bln in 2002," it said. (1 usd = 55.80 pesos)
     afxmanila@afxasia.com

 

Manila shares close weaker on technical correction, Wall Street falls


     MANILA (AFX-ASIA) - Share prices closed sharply weaker on a technical correction after a recent rally, with sentiment undermined by Wall Street's declines overnight, dealers said.
     The 30-company composite index closed down 28.36 points or 1.76 pct at 1, 581.95 on volume of 468.7 mln shares worth 684.3 mln pesos. It moved between 1,577.09 and 1,610.31.
     In the broader market, losers beat gainers 49 to 12, with 34 stocks unchanged.
     "We reached a new high in more than three years so we have to correct and recharge. I think the next support level is at 1,550 or 1,560," said Ron Rodrigo, research consultant at Accord Capital Equities.
     The market had seen sustained gains on investors' optimism that incumbent Gloria Arroyo will win the May 10 presidential elections and expectations of strong corporate results for the first quarter.
     Investors want Arroyo to stay in office to ensure continuity of the reforms she has initiated, dealers said.
     Nestor Aguila, president of DA Market Securities, however said that yesterday's return of former education secretary Raul Roco from the US, where he sought treatment for chronic lower back pain, to resume his presidential campaign was used by the market as an excuse to take profits.
     Arroyo's score in opinion polls rose, expanding her lead over close rival Fernando Poe Jr of the opposition, after Roco left for the US. On his return to the campaign trail, however, he failed to fully answer questions about his health.
     Top-traded Philippine Long Distance Telephone Co (PLDT) was down 20 at 1, 135 on volume of 168,960 shares. The stock had rallied ahead of the release of its first quarter results, largely expected to show strong gains in the mobile phone business.
     PLDT rival Globe Telecom fell 45 to 855 on heavy selling by foreign brokerage firms.
     While analysts expect Globe's first quarter earnings to show strong gains in mobile phone business, they said the issue of company borrowings needs to be addressed.
     A. Soriano Corp fell 0.05 to 0.95 following cross sales involving most of the 82.2 mln shares traded.
     Bank of the Philippine Islands was down 1.00 at 49.50.
     Mall operator SM Prime Holdings was down 0.10 at 6.30.
     Ayala Land was down 0.10 at 5.80, while parent Ayala Corp dropped 0.10 to 5.90.
     First Philippine Holdings was down 0.50 at 28.
     Manila Electric B, available to foreign investors, was down 1.00 at 30. 50, while Meralco A fell 0.25 to 19.75.
     Metrobank was unchanged at 25, giving back gains made after saying it expects first quarter net profit to have grown more than 20 pct over the year-earlier level of 465 mln pesos.
     The country's largest lender also declared a 0.40 peso per share cash dividend, in line with a new policy that sets yearly declaration of a 4.0 pct cash dividend.
     It expects net profit this year to come in at 3.5-4.0 bln pesos compared with 3.01 bln last year.
     PLDT affiliate Pilipino Telephone was down 0.02 at 1.74.
     The all-shares index was down 10.60 points at 977.60.
     The commercial-industrial index fell 45.62 to 2,483.00, while property dropped 11.63 to 556.95
     Mining shed 47.28 to 1,405.36, while oil retreated 0.02 to 1.18.
     Banking and financial services fell 4.69 to 449.79.
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

Philippines stuck in high-debt, low-investment trap - ADB


     MANILA (AFX-ASIA) - The Asian Development Bank said heavy debt and low investment are clouding the long-term prospects for the Philippine economy, which now relies mainly on consumer spending.
     Its gross domestic product grew 4.5 pct last year with private consumption at a 13-year high and the economy is expected to expand slightly at a rate of 4.5-5.5 pct in the next two years, the Manila-based lender said.
     Meanwhile, the population has grown at a 2.36 pct clip, leading to minimal growth in per capita income and a single-digit rise in exports, it said, adding that the unemployment rate stands at 11 pct.
     Foreign direct investment (FDI) flows plunged to 320 mln usd last year from 1.8 bln in 2002, with growth in the next two year expected to be below 1 pct, ADB deputy chief economist Jean-Pierre Verbiest said.
     The country "needs to raise the investment rate. That is the only way to raise economic growth and generate employment," he said, adding that curbing the population growth rate "will help."
     A second ADB economist, Jesus Felipe, said GDP would have to grow at least 6 pct annually "for one decade", with per capita GDP rising at least 4. 5 pct each year, to make a dent on widespread poverty.
     Verbiest said the Philippines is "losing a lot of competitiveness" in attracting foreign capital due to inadequate infrastructure, governance and regulatory issues, legal constraints to foreign investments in some sectors of the economy and a rigid labor market.
     These structural problems go beyond the general uncertainty being ascribed to the May 10 presidential election, he added.
     Felipe said the country is in a vicious cycle. Bad infrastructure is linked to the "lack of investments over many years," which, in turn, is "related" to the chronic budget deficits.
     An ADB report warned that "without additional tax measures, the government may miss its (revenue) target" for 2004.
     In order to make up for weak revenue streams, government debt has soared to about 100 bln usd, half of it external, or about 120 pct of GDP.
     The high debt service load crowds out government spending on infrastructure and leaves precious little for improving the lot of the poor, who make up about 40 pct of the population, according to government figures.
     The "fiscal issue is central to the Philippines' economic outlook," said Verbiest.
     "That debt has to decrease," he said. "Essentially, you have to raise revenues. You have no other alternatives."
     Verbiest said the high debt made the Philippine economy vulnerable to a looming rise in interest rates in the US expected in the second half.
     Higher rates will raise the debt service load, while a combination of higher rates and oil prices, which the bank projected to average at 30 usd a barrel this year, "could influence the peso," he said.
     The Philippines has only managed to post a national budget surplus six times over the past 30 years -- four of them before the 1997 Asian financial crisis, Felipe said.
     Meanwhile, the rate of nominal wage increases has been above that of productivity improvements in the past 20 years, he added.
     The budget deficit picture should improve to about 4.2 pct of GDP this year from 4.6 pct in 2003, "but, certainly, there is much scope to raise revenues," Verbiest said.
     The government's revenue-to-GDP ratio, which stood at 10.4 pct in 2003, is among the lowest in the region and Verbiest said it has to rise above 20 pct at the very least.

 

Philippines' Security Bank Q1 net profit up 20 pct yr/yr


     MANILA (AFX-ASIA) - Security Bank Corp said its first quarter to March net profit grew 20 pct year-on-year to 187.5 mln pesos on interest gains.
     The bank said the volume of its deposits and investment securities rose in the quarter and it exerted more aggressive collection efforts on non-performing loans (NPL).
     In a statement, Security Bank president and chief executive officer Alberto Villarosa said he is confident the growth trend can be sustained in the coming months as it further intensifies marketing and investment efforts.
     Revenue in the first quarter rose 15 pct year-on-year with the net interest margin jumping 51 pct from the year-earlier level, the bank said.
     "This growth in net margin was more than enough to cover the drop in securities trading gains from a record high in the first quarter of 2003," the bank said.
     "Market conditions were not favorable for securities trading in the first quarter of 2004 due to the increase in the yield curves for both the peso and (US) dollar interest rates."
     Operating expenses, net of gross receipts tax, were kept under control, rising only 6 pct year-on-year, it said.
     The bank's NPL portfolio shrank 14 pct to 3.2 bln pesos from last year's level of 3.7 bln, resulting in a lower NPL ratio of 8.3 pct as at end-March, compared with 8.7 pct as at end-2003.
     Coverage for the NPL stood at 58 pct as at end-March, versus 40 pct last year.
     "Despite the reduction in both the absolute levels of NPL and the NPL ratio, the bank continued to take a prudent stand with its aggressive provisioning policy," the bank said.
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

Philippines' Security Bank Q1 net profit up 20 pct yr/yr on interest gains


     MANILA (AFX-ASIA) - Security Bank Corp said it net profit grew 20 pct year-on-year to 187.5 mln pesos for the first quarter to March on interest gains.
     The bank said its volumes of deposits and investment securities increased during the period, and it exerted more aggressive collection efforts on non-performing loans.
     In a statement, Security Bank president and chief executive officer Alberto Villarosa said he is confident that the growth trend can be sustained in the coming months as the bank intensifies further its marketing and investment efforts.
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

STOCK ALERT - Philippines' Metrobank firmer on earnings prospects, dividend


     MANILA (AFX-ASIA) - Metropolitan Bank & Trust Co (Metrobank) was higher in early trade against a weak market, after saying it expects first quarter net profit to have grown more than 20 pct over the previous year, dealers said.
     Buying in the stock also followed the declaration by the country's largest lender of a 0.40 peso per share cash dividend, in line with a new policy that sets yearly declaration of a 4.0 pct cash dividend, they said.
     Metrobank was up 0.50 peso at 25.50 on 252,900 shares.
     The bank said the regular cash dividend will be distributed semi-annually, subject to the availability of retained earnings and the approval of regulatory agencies.
     It expects net profit this year to come in at 3.5-4.0 bln pesos compared with 3.01 bln last year.
     Metrobank booked net profit of 465 mln pesos in the first quarter of 2003.
     (1 usd = 55.80 pesos)
     afxmanila@afxasia.com

 

STOCK ALERT - Philippines' PLDT weaker on profit-taking


     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co (PLDT) was weaker in early trade, extending its decline as investors locked in significant recent gains, dealers said.
     PLDT was down 15 pesos at 1,140 on volume of 34,530 shares.
     The stock made sustained gains of late amid expectations of robust earnings for the first quarter and full year and on a boost from gains in the mobile phone business.
     (1 usd = 55.8 pesos)
     afxmanila@afxasia.com

 

Philippines' First Metro plans to underwrite Splash, Shell IPOs - report


     MANILA (AFX-ASIA) - First Metro Investment Corp, the investment banking arm of the Metrobank Group, plans to underwrite two to three planned initial public offerings (IPO) in the local market this year, BusinessWorld newspaper reported, citing company president Francisco Sebastian.
     Sebastian said First Metro is setting its sights on the planned IPOs of beauty product manufacturer Splash Corp and Pilipinas Shell Petroleum Corp.
     He said First Metro also expects to generate more business from giving financial advisory for the privatization of the National Power Corp's assets.
     afxmanila@afxasia.com

 

Philippine National Bank sees 19 pct yr/yr growth in 2004 net profit - report


     MANILA (AFX-ASIA) - Philippine National Bank (PNB) expects its net profit for 2004 to grow 19 pct year-on-year to 200 mln pesos from 168 mln, the BusinessWorld newspaper quoted bank president Lorenzo Tan as saying.
     "Things will start picking up after the (May 10 presidential) election," he said.
     PNB, partly-owned by the government and businessman Lucio Tan, posted a first quarter to March net profit of 20 mln pesos, down from 53 mln in the same period last year, on some non-recurring effects of tax changes, a rise in interest rates and a different timing in the deployment of Tier 2 funds.
     However, PNB said the period was its seventh consecutive profitable quarter after five years of losses.
     The lender said the first-quarter results were better than it had targeted and that it expects to gain momentum in the third and fourth quarters of this year.
     (1 usd = 55.75 pesos)
     afxmanila@afxasia.com

 

Philippines' Napocor may issue 1 bln usd global bonds - report


     MANILA (AFX-ASIA) - State-owned National Power Corp (Napocor) may issue 1 bln usd worth of global bonds on the back of the national government's success in raising 400 mln usd this week through the reopening of global bonds due 2011 and 2014, the Philippine Daily Inquirer reported, citing an unidentified source.
     The government sold the bonds to raise funds and help Napocor meet its financial needs this year.
     However, the report said Napocor may also make a similar move before the elections to cover fully its 1.5 bln usd funding requirements this year.
     afxmanila@afxasia.com

 

Philippine April CPI seen up 3.9 pct yr/yr on fuel, fare hikes - central bank


     MANILA (AFX-ASIA) - The central bank expects the Philippine consumer price index (CPI) to rise 3.9 pct year-on-year this month, a bit faster than last month's 3.8 pct, deputy governor Amando Tetangco Jr said.
     He said the pressure likely came from higher fuel prices and transport fares.
     The National Statistics Office will release the April CPI data on May 5.
     afxmanila@afxasia.com

 

Philippines' Metrobank sees 2004 net profit at 3.5-4 bln pesos


     (Updating with cash dividend declaration)
     MANILA (AFX-ASIA) - Metropolitan Bank & Trust Co (Metrobank) said it expects net profit this year to come in at 3.5-4.0 bln pesos compared with 3. 01 bln last year.
     The country's largest lender also expects its first quarter net profit to have grown more than 20 pct over the previous year.
     Metrobank booked net profit of 465 mln pesos in the first quarter of 2003.
     At today's annual stockholders' meeting, Metrobank chairman George SK Ty announced the declaration of a 2.0 pct cash dividend. Record and payments dates will be announced later, he said.
     Ty also announced the board of directors' approval of a policy that sets yearly declaration of a 4.0 pct cash dividend, to be distributed semi-annually, subject to the availability of retained earnings and the approval of regulatory agencies.
     (1 usd = 55.75 pesos)
     afxmanila@afxasia.com
 

 

Philippines' Arroyo signs law restoring tax-exempt status of FCDUs, OBUs


     MANILA (AFX-ASIA) - President Gloria Arroyo has signed into law a measure restoring tax exemptions for foreign currency deposit units (FCDUs) and offshore banking units (OBUs)
     The law, a consolidation of Senate Bill No 2747 and House Bill No 5246, which were passed in February, however, prescribes that interest income from foreign currency loans granted by banks shall be subject to a final tax of 10 pct.
     Central bank governor Rafael Buenaventura earlier said this legislation is "very important" since "the FCDU and OBU systems play a very critical role in mobilizing foreign savings and attracting foreign investments into the economy."
     He said foreign savings and investments provide a secondary source of dollar liquidity for the country.
     By maintaining their special tax status, he said the viability of operations of FCDUs and OBUs will be reinforced.
     He said clarification on the tax-exemption is necessary, as the tax treatment seems to have been modified when the comprehensive tax reform law was passed in 1997.
     afxmanila@afxasia.com
 

 

Mitsubishi Motors Philippines to invest 10 bln pesos for new SUV model - DTI


     MANILA (AFX-ASIA) - Mitsubishi Motors Philippines Corp will invest some 10 bln pesos to make a new sports utility vehicle (SUV) model in the country, the Department of Trade and Industry (DTI) said.
     In a statement, the DTI quoted Mitsubishi officials as saying the project, which will result in annual local parts purchases worth 5.5 bln pesos, will employ 6,000 people.
     The project calls for the production for export over the next six years of more than 200,000 SUVs, worth 200-240 mln usd. Two-thirds of the total produced will be exported to Southeast Asian countries.
     The DTI said the rest of the output will be exported to the Middle Eastern, African and South American markets.
     afxmanila@afxasia.com
 

 

Philippines' Ayala Land 2-bln peso borrowing plan approved by SEC


     MANILA (AFX-ASIA) - The Securities and Exchange Commission (SEC) said it has approved Ayala Land Inc's plan to issue 2 bln pesos worth of short-term commercial papers (STCPs), the proceeds of which will be used for loan refinancing, operating expenses and purchase of inventories.
     Ayala Land earlier said the STCPs will be priced at 100 pct of face value or at par, with the issue consisting of fixed-rate and/or floating rate tranches.
     Philippine Rating Services Corp has assigned a rating of PRS 1 to the issue, taking into account Ayala Land's strong capability to pay both interest and principal on time.
     Of the total amount, 1.5 bln pesos will be used to repay maturing debts while 300 mln will be for operating expenses and 180 mln will be allocated for buying inventories.
     Ayala Land, the property unit of Ayala Corp, has some 2.05 bln pesos in maturing loans this year.
     Ayala Land has appointed Standard Chartered Bank as issue manager.
     (1 usd = 55.7 pesos)
     afxmanila@afxasia.com
 

 

Philippines' San Miguel sets up Manila port distribution center to cut costs


     MANILA (AFX-ASIA) - San Miguel Corp said it inaugurated today its Manila Harbor Distribution Center, which will help reduce operating costs.
     Managed by San Miguel Logistics Asia Corporation (SMLAC), a newly-established unit, the new facility is one of the strategic port and inland distribution centers to be set up all over the Philippines.
     "In Metro Manila alone, we can save about 300 mln pesos over five years by doing away with the rented sales offices," said Benjamin Lagman, San Miguel vice president for corporate logistics.
     He said the centers cluster the various San Miguel divisions' warehouses and sales offices, optimizing the use of facilities and eliminating the duplication of functions.
     "In addition to the rationalization of physical assets, costs savings can also be realized through economies of scale, operational efficiencies, process enhancements, and synchronization of supply chain activities across the various users," he said.
     The new distribution center is the eleventh such facility that the SMLAC now operates.
     The conversion of the sales office of Coca-Cola Beverage Group in Mendiola, Sta. Mesa, in Manila into a distribution center is also underway, Lagman said.
     Two other distribution centers are also planned this year, one in Pasig and another in Cabanatuan City, Nueva Ecija.
     SMLAC will also provide logistics services to the recently formed San Miguel Food Shops, which will exclusively sell San Miguel products.
     
     Eventually, SMLAC is expected to expand its outbound logistics services and to avail of opportunities from external clients in industries non-competing with San Miguel's businesses.
     San Miguel sells nine of 10 beer bottles sold in the Philippines, and is also involved in meat, poultry, livestock, liquor, soft drinks, ice cream, bottled drinking water and packaging businesses.
     It is currently undertaking a regional expansion that cover such markets as China, Taiwan, Australia, Thailand, Indonesia, Vietnam and Malaysia.
     San Miguel chairman and chief executive officer Eduardo Cojuangco has vowed to transform the conglomerate into one of Asia's top ten largest food and beverage companies by 2007.
     (1 usd = 55.7 pesos)
     afxmanila@afxasia.com
 

 

Taiwan's 2004 GDP growth seen at 5.4 pct in 2004, 4.7 pct in 2005 - ADB


     MANILA (AFX-ASIA) - Taiwan's gross domestic product is forecast to grow 5. 4 pct this year on the back of surging exports, a further rise in domestic demand and structural changes in the economy, before slowing to 4.7 pct in 2005, the Asian Development Bank said today.
     "Buoyant external demand, especially for IT products, will be a boost to economic growth in 2004," the Manila-based bank said in its latest Asian Development Outlook report.
     The ADB projected that Taiwan exports will grow 8 pct in 2004 and 7.4 pct in 2005, while imports will rise at a faster 8.7 pct this year and 7.6 pct in 2005 on strengthening domestic demand.
     "Higher levels of exports and capacity utilization have prompted major exporters to increase capital spending and still further investment is likely, " the bank said.
     "Some major companies, such as Taiwan Semiconductor Manufacturing Co, the world's largest semiconductor foundry, have indicated they will raise their investment in 2004."
     The bank noted that rising exports and demand have led to increased bank lending to the private sector.
     The ADB expects investments in Taiwan to surge 8.5 pct this year and 7.5 pct in 2005, which will be a major factor in the robust overall economic performance.
     "The gains in exports and capital investment, in turn, should revive the labor market," it said.
     "Higher employment and firmer asset prices will likely bolster private consumption, which is expected to expand 4 pct in 2004 and 3.8 pct in 2005."
     The ADB sees inflation in Taiwan coming in at a low 0.8 pct this year and 1.2 pct in 2005, "reflecting the competitive pressures in the domestic market. "
     Strong economic and revenue expansion will narrow the budget deficit, while public debt is forecast to rise because of the upturn in government borrowing to finance new projects, it added.
     It said interest rates may rise this year and in 2005, but will likely remain moderate, partly because of low domestic inflationary pressures.
     "The economy depends heavily on the performance of its key trading partners, so this generally upbeat outlook assumes that the global economy will strengthen in 2004-2005," the ADB said.
     The ADB added that longer-term policies are needed to address several challenges, including rising income inequalities.
     Another challenge is how best to manage the relationship between deepening economic integration on the one hand and potential political uncertainties on the other, it said.
     The bank also noted that since Taiwan's economy is now more vulnerable to a weakening in global demand for IT products, another challenge is "for economic policies to take into consideration such volatility."
     "For example, more prudent fiscal policies are required, so that budgets in good economic years make allowance for periods when the economy turns down and requires policy stimulation," the ADB said.
 

 

Manila shares close at fresh 3-yr high on hopes of Arroyo win, strong earnings


     MANILA (AFX-ASIA) - Share prices closed firmer, extending gains amid investors' increasing confidence that incumbent Gloria Arroyo will win in the May 10 presidential elections, dealers said.
     Investors also continued to position themselves in selected blue-chip companies which are expected to report strong first quarter results, dealers said.
     The 30-company composite index closed up 13.38 points or 0.84 pct at a fresh three-year high of 1,610.31, with volume reaching 349.5 mln shares valued at 904.1 mln pesos. It moved in a range of 1,597.63 and 1,620.37.
     In the broader market, gainers slightly beat losers 22 to 21, with 36 stocks unchanged.
     "I think the major factor really is that all the surveys show that GMA (Gloria Macapagal Arroyo) is leading, and I think the market is already starting to discount that," said Eagle Equities president Joseph Roxas. President Arroyo, who is perceived to be the most market-friendly among the presidential candidates, has widened her lead in the latest opinion poll conducted by private groups.
     Investors want her to remain in office to ensure continuity in reforms she has initiated, dealers said.
     The momentum was sustained despite the return this morning of former education secretary Raul Roco from the US, where he underwent a medical check-up for lower back pain, to resume his presidential campaign.
     Arroyo's score in opinion polls rose after Roco announced he needed medical treatment in the US.
     "The momentum remained strong, but there was profit-taking later in the session in select stocks," said Westlink Global Equities chairman Rommel Macapagal.
     Macapagal said the market may move sideways in the coming sessions as investors are likely to take a breather to see if market support will prove to be strong at the 1,600-point key index level.
     Investors have started locking in profits in stocks such as Philippine Long Distance Telephone Co (PLDT), capping the market's upside.
     Top-traded PLDT was down 5.00 pesos at 1,155 on volume of 126,650 shares. The stock had seen sustained gains amid expectations of rosy earnings in the first quarter and the full year.
     Bank of the Philippine Islands was up 2.00 at 50.50.
     Ayala Land was up 0.20 at 5.90, while parent Ayala Corp rose 0.20 to 6.00.
     Globe Telecom was down 5.00 at 900.
     Ayala Corp and unit Globe are due to announce first-quarter results next week.
     Manila Electric B, available to foreign investors, was down 0.50 at 31. 50, while Meralco A was unchanged at 20, following sustained gains after the power retailer returned to profitability in the first quarter to March.
     ABS-CBN Holdings Corp was up 1.00 at 26.
     PLDT affiliate Pilipino Telephone Corp was down 0.04 at 1.76.
     The all-shares index was up 1.81 points at 988.20.
     The commercial-industrial index was up 9.08 at 2,528.62 and property was up 8.96 at 568.58.
     Mining and oil were unchanged at 1,452.64 and 1.20, respectively.
     Banking and financial services rose 9.35 to 454.48.
     (1 usd = 55.7 pesos)
     afxmanila@afxasia.com
 

 

Asia faces new banking crises without reforms of the sector - ADB


     MANILA (AFX-ASIA) - India, Pakistan and Taiwan face the risk of new banking crises unless authorities in the three countries reform the sector, the Asian Development Bank (ADB) said today.
     Lax regulations on provisioning, accounting and loan classification led to the 1997-1998 Asian financial crisis that ravaged the economies of Indonesia, South Korea, Malaysia, the Philippines and Thailand and created shock waves felt across the globe.
     Seven years on, India, Pakistan and Taiwan "may face one if the authorities are unable to forestall a crisis using preemptive financial reforms," the ADB said in its annual economic outlook report.
     The pressure of globalization and ensuing liberalization has exposed the shortcomings of the countries' financial sectors, including low capitalization ratios, limited expertise in risk management, rising bad loans and inadequate banking supervision and regulation.
     "NPL (non-performing loan) ratios are reaching all-time highs in the three economies, even as the reported figures are still thought to underestimate the actual levels," it added.
     "The role globalization has played in exposing financial sector weaknesses suggests that financial sector problems could become more acute over the coming decade -- unless, critically, governments take advantage of the current macro-economic buoyancy to address them."
     Asian governments must develop capital markets to serve as alternative financing sources, improve corporate governance of banks and revamp insolvency laws, the report said.
     For Asia, as a whole, the NPL levels among 19 developing member economies where data is available has fallen to about 17 pct as of end-2002, but this is still more than double those of Latin America and Eastern Europe.
     The health of the banking sectors of the five previous crisis countries remains "fragile", while, in some others, "reform efforts have been more limited and problems may be looming," the ADB said.
     "This situation reflects cases where resolution schemes and banking supervision may not be working properly," or more importantly, "that banking sector reform has been limited and banks are creating new NPL, while disposing of the old ones."
     It cited problems in China, Bangladesh, Pakistan, the Philippines and some central Asian republics.
     China's problems have been mainly due to "substantial loans provided on other than commercial considerations".
     In the Philippines, which only passed an asset management company (AMC) law last year, the NPL ratio has been trending upward.
     "No transactions have yet taken place under the law" due to the high cost of setting up such vehicles and the limited investor base.
     The ADB said creating AMCs has become the central revival strategy for the crisis economies, where governments spend billions of dollars in liquidity support for distressed lenders or for buying NPL.
     "Further combined costs of cleaning up AMCs can still range from 4 pct of GDP (gross domestic product) in the Philippines to 13 pct for Thailand, despite the fiscal costs already incurred," which are equivalent to between 16 pct of GDP for Malaysia to 55 pct of GDP for Indonesia.
     "Deficiencies in national legal and judicial frameworks, particularly inadequacies in foreclosure and bankruptcy procedures and inexperienced judges have been major obstacles in the bank restructuring process," with creditor rights not in accord with international best practises.
     The ADB also warned the practise of banks and/or AMCs of using debt-equity swaps to dispose of NPL may come back to haunt them as such a moves may not improve banking operations, thereby raising the possibility of more NPL in the future.
 

 

STOCK ALERT - Philippines' Meralco firmer after return to profit in Q1


     MANILA (AFX-ASIA) - Manila Electric Co's (Meralco) shares were firmer in early trade, extending yesterday's gains, after the power retailer said it returned to profitability in the first quarter to March, dealers said.
     Meralco B, available to foreign investors, was up 0.50 peso at 32.50 on 383,100 shares, while Meralco A rose 0.50 to 20.50.
     The firm, whose franchise covers metropolitan Manila and nearby provinces, said yesterday it booked net profit of 344 mln pesos in the first quarter, a turning around from a net loss of 325 mln a year earlier, as energy sales grew a modest 2.2 pct year-on-year.
     Meralco said its energy sales are expected to increase during the summer months of the second quarter, and in the second half in line with an expected pick-up in manufacturing and retail activities.
     (1 usd = 55.7 pesos)
     afxmanila@afxasia.com
 

 

Philippine Treasury raises T-bill, T-bond offerings in May


     MANILA (AFX-ASIA) - The Bureau of Treasury (BTr) said it has decided to raise its T-bill offering at the fortnightly auction in May to 10 bln pesos from 9.0 bln this month.
     The BTr will also offer 4.0 bln worth of T-bonds, with maturity of two, four and seven years, at the weekly auction next month, up from 3.5 bln this month.
     In a memorandum to government securities dealers, National Treasurer Mina Figueroa said the BTr will offer 4.0 bln pesos worth of 91-day T-bills, up from this month's 3.5 bln.
     It will also increase the offering for 182-day bills to 3.5 bln pesos from 3.0 bln, while the offering for 364-day bills stays at 2.5 bln.
     (1 usd = 55.7 pesos)
     afxmanila@afxasia.com
 

 

Asia's developing economies must reform to attract FDI - ADB


     MANILA (AFX-ASIA) - Asia's developing economies must create commercially profitable and politically stable environments to be able to capture a greater share of the huge amount of foreign direct investment (FDI) now flowing into the region, the Asian Development Bank (ADB) said.
     In its latest Asian Development Outlook (ADO) publication, the Manila-based bank urged these economies to move away from restrictive investment regimes such as joint venture and domestic content requirements to attract FDI.
     "Since all countries face the same international commercial environment, the presumption is that host country policy regimes and institutional capacities are the deciding factors," the bank said in a special chapter in the ADO about FDI in developing Asia.
     "The challenge for host countries is to establish the right mix of institutions, incentives and infrastructure to create the enabling business and investment climate."
     The ADB said transparency about investment rules and regulations is also necessary in creating an investor-friendly environment.
     It added that the policy of government decentralization is also an important element that could affect FDI and its development potential.
     "As this policy takes root, it is possible that energetic local governments within a country will begin to compete among themselves to seize business opportunities, in the process bypassing cumbersome national agencies, " the bank said.
     "The challenge for national governments will be to encourage this competition potential, while ensuring that it operates in a manner consistent with national development objectives."
     The bank added that "the congruence between the reforms needed to pursue efficient growth and attract FDI offers the developing countries of Asia a win-win situation."
     FDI in developing Asia grew from 694 mln usd in 1970 to 138.6 bln usd in 2000, at an annual rate of 15.2 pct, before declining to 90.1 bln usd in 2002, according to the ADB.
     afxmanila@afxasia.com
 

 

ADB sees Philippine GDP up 4.5-5.5 pct in 2004, 2005 on consumer spending


     MANILA (AFX-ASIA) - The Philippines' gross domestic product (GDP) is expected to grow 4.5-5.5 pct in both 2004 and 2005, compared with 4.5 pct in 2003, on higher consumer spending, the Asian Development Bank said.
     The Manila-based bank released today its Asian Development Outlook 2004, an annual ADB publication that forecasts economic trends in the region, in which it noted that economic growth in the Philippines has primarily been driven by private consumption.
     In 2003, private consumption rose 5.1 pct over the previous year, the fastest rate since 1990, it said.
     The ADB expects better weather and higher election spending during the first half of this year to contribute to the expansion, although it noted that some investors are holding back until the presidential election is over in May.
     It also expects the Philippine economy to get a boost from electronics exports, which represent about 70 pct of total exports, on the back of brisk growth in the rest of Asia, particularly China, and improved global demand.
     At the sector level, it forecast that agriculture will pick up by 3.7-4.7 pct this year and 2005 and industry by 3.6-4.8 pct, led by stronger manufacturing as a result of higher global demand and a rise in public construction from election-related spending.
     The services sector is expected to grow 5.5-6.3 pct, it said.
     These forecasts, however, are based on the assumption of a smooth transition to a new government after the elections next month and no external shocks, the ADB said.
     It said the economic performance this year and 2005 will also be determined by progress in key economic legislation and policy reforms, improvement in security and law and order, and the country's capacity to take advantage of developments abroad, such as the growth being seen in China and outsourcing by industrial countries.
     The uncertainties, on the other hand, lie in the recovery of the US economy, the oil price outlook, the extent of peso depreciation, the budget deficit, and the outcome of the elections.
     The ADB said there is also a need to keep an eye on the Philippines' fiscal situation.
     Although the government met its first quarter targets, the bank said sustaining this performance is "very difficult" given election spending and a low tax revenue target of 13.6 pct of GDP for 2004.
     "The Bureau of Internal Revenue will probably not meet its initial revenue target because Congress did not pass the Indexation of Sin Taxes Bill to restructure the excise tax on distilled spirits, which will deprive the Bureau of about 7 bln pesos in potential revenues," it said.
     "Without additional tax measures, the government may miss its target."
     The government aims to limit this year's budget deficit to 197.8 bln pesos, or 4.2 pct of GDP, in line with its goal of achieving a balanced budget by 2009.
     The bank said challenges also remain in dealing with the issues of unemployment and population growth.
     "Unemployment remains high in the Philippines and is a major cause of poverty," it said, noting that the 566,000 new jobs generated in 2003, of which 60 pct were in the services sector, were not even enough to accommodate the 624,000 new entrants into the labor force.
     "In 2003, unemployment stood at 11.4 pct of the labor force. This is a reflection of the country's lack of capacity to generate enough employment to keep up with labor force growth, itself a function of the rapidly rising population," the bank said.
     The bank added that unless major economic and political reforms are accomplished, "it will be extremely difficult for the country to lift its potential growth rate, which is about 5.0 pct now, or to escape the vicious circle where capital scarcity implies low incomes, low incomes imply a limited capacity to save, and limited savings lead to limited investment and capacity scarcity."
     afxmanila@afxasia.com
 

 

Ford Philippines commits to export 16,000 CBU units this year - DTI


     MANILA (AFX-ASIA) - Ford Motor Company Philippines has committed to export 16,000 completely built up (CBU) units to other Southeast Asian countries this year, the Department of Trade and Industry (DTI) said.
     "The Ford's CBU export program is a solid proof of the country's capability to provide the necessary infrastructure to firms who would like to make the Philippines their manufacturing hub in Asia," Trade and Industry Secretary Cesar Purisima said in a statement.
     Ford Philippines' export program this year is expected to generate 220 mln usd in revenue, the DTI said.
     The company also plans to export completely knocked down (CKD) kits to Vietnam and possibly Malaysia, it added.
     Purisima said Ford has committed to manufacture and export 33,000 units in 2005 and 40,000 units in 2006.
     Under the government's automotive export program, participating auto manufacturing firms are required to export 10,000 CBU annually with a minimum freight-on-board value of 5,000 usd per unit.
     In 2003, Ford Philippines exported a total of 13,327 vehicles worth 190 mln usd to Thailand, consisting of such models as Lynx and Escape, and Mazda models Protege and Tribute.
     "Ford's aggressive car program has greatly benefited the country in terms of export revenues it has and will continue to generate and the growth and expertise of local manufacturers composed mostly of small and medium enterprises that provide automotive components," Purisima said.
     afxmanila@afxasia.com
 

 

Philippines' Nenaco loses 75 mln pesos after Marina grounds 5 vessels


     MANILA (AFX-ASIA) - Negros Navigation Co (Nenaco) said it has incurred loss of revenue totaling 75 mln pesos since Friday when regulator Maritime Industry Authority (Marina) grounded five of its vessels.
     Corporate communications head Gian Galvez said Nenaco, the shipping unit of Metro Pacific Corp, has been losing 3 mln pesos per ship a day due to Marina's refusal to grant the inter-island shipping firm a permit to operate.
     As a result of the vessels' grounding, Nenaco said it has been unable to serve 14 destinations in the Visayas and Mindanao regions since April 23. Only one Nenaco vessel is allowed to operate.
     The grounding may result in job losses, he warned. Nenaco has an 8, 000-strong work force.
     Marina administrator Oscar Sevilla has ordered Nenaco to raise 1.5 bln pesos in fresh equity before it lifts the grounding order.
     Sevilla said Nenaco is financially incapable to continue operating due to the strain of its 2.5 bln pesos due and demandable debts. He also ordered the company to submit its 2003 financial statement.
     The Manila Regional Trial Court has granted Nenaco's petition for an immediate suspension of debt payments, seen as the first step towards the implementation of the shipping firm's rehabilitation program
     "We are losing 3 mln pesos from combined freight and passenger tickets per ship daily. We hope to be allowed to resume our operations, especially now that it is the peak season," said Galvez.
     Sevilla said that, under the Public Securities Act, a shipping franchise holder like Nenaco should be financially capable before it can be allowed to operate.
     "Sevilla got the wrong computation. We are financially capable to sustain our operations. We have records to prove that. Besides, if Marina will not allow us to operate, how else could we be able to service our debts, " Galvez asked.
     As for the routes that Nenaco cannot now serve, Marina has asked Aboitiz Transport System and Sulpicio Lines Inc to apply for additional frequencies within the week.
     (1 usd = 55.63 pesos)
     afxmanila@afxasia.com
 

 

Manila shares outlook - Mixed to higher on Q1 earnings, Arroyo poll lead


     MANILA (AFX-ASIA) - Share prices are expected to open mixed to higher on follow-through buying amid expectations of strong first quarter corporate results and optimism over incumbent Gloria Arroyo's victory in the May 10 presidential elections, dealers said.
     However, dealers are not ruling out profit-taking in select stocks given the market's significant gains over the past few days.
     Yesterday, the composite index closed up 25.03 points or 1.59 pct at 1, 596.93, its highest level in more than three years.
     Dealers see a test of the 1,600-point immediate resistance level.
     "With earnings still to be released, investors may continue with the accumulation of select stocks with good first quarter earnings (prospects)," BPI Securities said in its daily report.
     It sees the market's support at 1,572.
     Dealers said financial markets are cheering Arroyo's lead in the latest opinion polls as reflected by falling interest rates, a rising peso against the US dollar, and tighter spreads on Philippine bonds in the international market.
     Investors consider Arroyo as the most market-friendly and qualified among the presidential candidates.
     The peso closed at 55.630 to the dollar yesterday compared with 55.670 on Monday.
     afxmanila@afxasia.com
 

 


 

 


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